The past weekend’s sell-off saw Bitcoin’s price briefly dip below the critical psychological threshold of $75,000, triggering an overnight reversal in market sentiment. A notable wager on the prediction platform Polymarket is drawing significant attention: the probability of Bitcoin falling below $65,000 by 2026 has surged to 72%, attracting nearly a million dollars in stakes. This isn’t merely a numbers game; it serves as a stark reflection of the powerful undercurrents sweeping through the crypto market – a rapid shift from post-Trump election euphoria to widespread anxiety about a potential “deep dive.”
Adding to the concern for seasoned investors, this downturn marks the first time since late 2023 that MicroStrategy, the publicly traded company holding the largest amount of Bitcoin, has seen its average cost basis challenged. It’s akin to an endurance race leader suddenly finding the track beneath their feet growing slippery.
Why the Sudden Shift in Market Sentiment?
On the surface, this appears to be a mere price correction. However, a deeper look reveals several forces converging, collectively pulling the market in a new direction.
Technical “Breakdown” Signals
According to observations from some on-chain analysis firms, Bitcoin has effectively entered what they define as a “bear market” cycle since breaking below its 365-day moving average in November 2025. This long-term moving average is often considered a crucial “bull-bear dividing line,” and its loss frequently triggers systematic deleveraging among technically-minded investors. I recall the 2018 bear market, where a similar breach of a long-term moving average led to months of gradual decline and capitulation; attempting to “buy the dip” too early felt like catching a falling knife.
Tightening Macroeconomic Liquidity
Furthermore, the “liquidity faucet” of global macroeconomics appears to be tightening. Macro analysts suggest that the current pullback stems more from a broader tightening of the financial environment in the United States rather than any fatal flaw within cryptocurrencies themselves. Changes in the Federal Reserve’s balance sheet and the liquidity-draining effect of Treasury bond issuance are seemingly distant macroeconomic factors that are, in fact, precisely transmitted to Bitcoin’s price through the pricing logic of risk assets. When the tide of liquidity recedes, it’s often the most volatile assets that are first to reveal their ‘swimming trunks.’
A Philosophical Re-evaluation from Industry Insiders
Finally, an intriguing perspective emerges from within the industry. Mati Greenspan, CEO of Quantum Economics, reminds us that perhaps we’ve been focusing on the wrong metrics all along. He recently posted on social media that Bitcoin’s core design objective is to serve as a currency independent of the traditional banking system, with price appreciation merely a potential “side effect” rather than its raison d’être. This viewpoint serves as a cold splash of water, prompting us to consider: when the market fixates solely on price fluctuations, has it strayed from Bitcoin’s original vision?
How Accurate is the Prediction Market’s “Crystal Ball”?
The high-probability wagers on Polymarket undoubtedly amplify bearish expectations. Beyond the bet on falling below $65,000, the probability of Bitcoin dropping to $55,000 has also reached 61%. Simultaneously, there’s still a 54% chance it could rebound to the $100,000 mark by year-end. This clear tug-of-war between bullish and bearish sentiment highlights the significant divergence within the market.
However, a crucial question arises: do prediction market “probabilities” equate to future “facts”? Not necessarily. They primarily reflect the collective sentiment of current market participants, expressed through real capital. This sentiment can be highly contagious and even self-fulfilling, yet it can also reverse instantly due to an unexpected positive catalyst. For instance, during the sharp crash in March 2020, no one could have predicted the epic bull run that followed. Prediction markets are excellent windows into market psychology, but they are by no means an infallible navigation map for investment.
Furthermore, Polymarket itself faces regulatory challenges, such as restrictions in regions like Nevada due to licensing issues. This serves as a reminder that this “sentiment barometer” operates within its own dynamic and evolving environment.
Institutional Views Clash: Who Should Retail Investors Heed?
Amidst this market uncertainty, an interesting “clash” of opinions has emerged among large institutions.
On one hand, bearish sentiment pervades prediction markets and among some analysts. On the other hand, just a few months ago, several top-tier institutions released considerably optimistic forecasts. Grayscale Investments, for example, had predicted Bitcoin might surpass its previous all-time high of $126,000 in the first half of 2026, citing sustained institutional adoption and a progressively clearer regulatory landscape. Analysts from Standard Chartered and Bernstein had also projected a target price of $150,000 by 2026, although they later revised their expectations downwards due to a slowdown in ETF inflows.
This apparent contradiction is not uncommon. The long-term logic of institutions (such as Bitcoin’s scarcity and its “digital gold” narrative) often operates on a different linguistic plane than short-term market volatility (liquidity, sentiment, technicals). For investors, the key lies in discerning which type of voice you are hearing: is it a multi-year trend assessment, or a warning about risks in the coming quarters?
What Should Investors Focus On Now?
With abundant market noise, I believe it’s more beneficial to concentrate on several substantive observation points rather than being swayed by mere probabilities of price movements.
- MicroStrategy’s ‘Cost Line’ Defense: As a significant market bellwether, the relationship between its stock price and its average Bitcoin cost basis is worth monitoring. If Bitcoin consistently trades below its average cost, will this shake MicroStrategy’s long-term holding strategy or influence other public companies’ willingness to follow suit? This serves as an important directional indicator.
- Real Macroeconomic Liquidity Data: Instead of mere speculation, pay attention to concrete data such as the Federal Reserve’s balance sheet and the U.S. Treasury General Account (TGA) balance. These are the fundamental “driving forces” behind all risk assets, including cryptocurrencies.
- The ‘Quality’ and ‘Quantity’ of On-Chain Activity: When prices fall, are long-term holders panic-selling, or are they accumulating excessively? On-chain data can reveal whether holdings are dispersing or concentrating. For example, examining changes in the supply held by long-term holders and exchange inflow/outflow metrics often provides more forward-looking insights than simply scrutinizing price charts.
- Your Enduring Investment Thesis: This is arguably the most crucial point. What was your original rationale for investing in Bitcoin? Was it a belief in its long-term potential as a store of value, or merely for short-term speculation? If your long-term thesis remains unchanged (e.g., global monetary expansion, sovereign credit risk), then market volatility becomes a moment to test your conviction and potentially offer better entry opportunities. If your investment was merely driven by hype, then any market tremor will be enough to cause significant anxiety.
The market invariably swings between excessive optimism and excessive pessimism. When 72% of participants on Polymarket are betting on a decline, it might be precisely the moment we need to maintain a degree of calm and engage in contrarian thinking. After all, in the crypto world, consensus is often expensive, and true opportunities frequently emerge where consensus breaks down. Of course, any judgment must be made in conjunction with one’s personal circumstances; market uncertainty is ever-present, making prudent position management and risk control an essential lesson for navigating any cycle.
Disclaimer: This article provides market information only. All content and opinions are for reference purposes only and do not constitute investment advice. They do not represent the views or positions of the author or BlockTempo. Investors should make their own decisions and trades. The author and BlockTempo will not bear any responsibility for direct or indirect losses incurred by investors’ transactions.
